The Westermarck effect is named after the Finnish anthropolgist, Edward Westermarck who in his "The History of Human Marriage" (1891) proposed the following theory; that humans avoid mating with individuals with whom they have been closely associated in childhood.
Sigmund Freud dismissed this idea as "preposterous" and advanced a different hyothesis, namely that heterosexual lust between family members was the norm; "The first choice of object in mankind is regularly an incestous one, directed to the mother and sister of men, and the most stringent prohibitions are required to prevent this sustained infantile tendency from being carried into effect." James Fraser, the author of "The Golden Bough" agreed with Freud, arguing that if the Westermarck effect existed there would no need of an incest taboo, and since such taboos were widespread there was no effect.
So the ideas of Westermarck were rejected and those of Sigmund Freud became the orthodox view until the late twentieth century when evidence began emerging as to which of the two competing theories were correct.
Arthur Wolf carried out a study of 14,200 Taiwanese minor marriages between 1957 and 1995. (A minor marriage is a Chinese custom by which a family adopts an infant girl, with the intention of later marrying the girl to their son.) Wolf discovered that the children in question often strongly resisted the idea of marrying when they were of age, that they were three times likely to become divorced, produced 40% fewer children, and the wives were three times more likely to commit adultery. He identified the key factor as the closeness of the relationship during the first thirty months of the lives of both partners. The more time they had spent together during those crucial first thirty months, the more likely they were to reject the idea of marriage and more likely any subsequent marriage would fail.
Further evidence arose with the work of Joseph Shepher in 1960s in Israeli Kibbutzim. There children where raised collectively in creches, and Shepher found that not only did children raised in such an enviroment not marry within their kibbutz peer group, but that there were no instances of any sexual contact whatsover between peer group members.
The evidence therefore shows that Sigmund Freud was wrong and that Edward Westermarck was correct. Science has yet to determine how the Westermack effect originated and neither has the stimulus that triggers the effect been pinpointed, but it is reasonable to now state that humanity operates by a simple rule of thumb whereby individuals inherently reject the idea of sexual intercourse with those with whom they have been in close contact with in early childood.
Consilience: The Unity of Knowledge by Edward. O. Wilson (1998)